U.S. producer prices picked up steam for a second straight month in May as the cost of energy products and services increased. However, government figures released Wednesday show the lingering effects of a strong American dollar and lower energy prices which should likely keep inflation tame for a while.
The U.S. Labor Department's producer price index for final demand increased 0.4%last month after rising 0.2% in April. In the 12 months through May, the PPI slipped 0.1% after being unchanged in April.
Economists polled by Reuters had forecast the PPI gaining 0.3% last month and slipping 0.1% rom a year ago.
A surge in the dollar and the plunge in oil prices between June 2014 and December 2015 have dampened price pressures, keeping inflation below the Federal Reserve's 2% target.
Last month, energy prices jumped 2.8% after increasing 0.2% in April. Energy prices accounted for two-thirds of the 0.7% rise in the cost of goods last month.
Prices for services rose 0.2% after inching up 0.1% in April. The increase reflected an increase in margins received by wholesalers and retailers.
A key measure of underlying producer price pressures that excludes food, energy and trade services dipped 0.1% last month after rising 0.3% in April.
The so-called core PPI was up 0.8% in the 12 months through May. The core PPI increased 0.9% in April.
